Architecture / June 22, 2018 / Oriane.
The relationship of quality to cost is often expressed in the saying that you get what you pay for. Cost is a critical factor in most building projects and some clients will seek a low price. Low price and maximum price competition, however, often have negative impacts on quality standards and achieving best value for money overall. In the current economic climate below cost tendering has heightened the risk of contractor insolvency and it may be difficult and expensive to obtain protection from this risk. Unrealistic and inadequate budgets often lead to projects becoming finance driven where cheaper options are preferred to better or more sustainable alternatives. Certain clients may have fixed budgets which may not be exceeded in any circumstances. In such circumstances the client will expect the quantity surveyor to maintain rigorous cost control during the project in order to deliver the project within budget. Designing to achieve such cost limits might curtail the introduction of beneficial features and or variations which may result in excessive running and maintenance costs later on.
The clients attitude towards initial versus the whole life cost of the building can significantly influence the specification. Buildings incur costs over their life time; these include initial capital costs, operating costs, maintenance, disposal and finance costs. The key decision is whether to spend more money initially on better alternatives in order to save money in maintaining and operating the facility
Insulation is an area where some look to save. Because after all, the reasoning goes, you cannot see the insulation in the walls or the attic once it is complete and who wants to spend money on things you can not see in your new home? Do not make this mistake. Not only will it translate into a lifetime of higher monthly energy bills, but it will lead to everyday discomfort with the home feeling too cold in winter and too hot in summer.
The payment arrangements adopted on a contract directly affects the level of risk borne by the contractor. Where the contract is let on the basis of a drawings and specification lump sum the contractor assumes the risk for both the quantity and pricing. In lump sum contacts based on bills of quantities and remeasurement contracts the contractor assumes the risk for the pricing only. With reimbursement contracts the client assumes the risk for the quantity and pricing. The payment arrangement, therefore, directly motivates the contractors efforts to carry out the work in an efficient and economic manner. This in turn has a major impact on the final price paid by the client.